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The advantages of starting from zero your startup: The Tesla case

Volkswagen CEO Herbert Diess spoke in an interview about the Group’s electric car offensive, the automotive industry and new challengers. Anyone who will be the leading provider of future mobility is in his view open.

The emerging electric car startups

It is “unclear” whether major manufacturers like Volkswagen or emerging electric car startups will be ahead, Diess said. The advantage of newly founded competitors such as Tesla is that they can start from zero and start up. Established carmakers with million sales, however, would have to switch during operation on the alternative drive technology.

“I think Tesla is doing a good job. You do not have to worry about legacy issues. You do not have to deal with the next fuel generation for internal combustion engines, so you can focus on the future. That’s an advantage, “Diess said. Volkswagen has the advantage in booting up the production, with which startups would have great problems.

“Some of our competitors are much faster when it comes to software – we’re still lagging behind in software development and functionality”, continues Diess. “But we are good with quantities, so we have a chance”. The Wolfsburg car giant has sold about 40,000 electric cars last year, 2020 it should be up to 200,000, five years later then already three million.

Hardware remains core business

Volkswagen wants to focus more on Apple in the future. The tech giant gets a lot of time with new products, and pushes their introduction and market penetration all the more consistently. Despite the great importance of software Diess Apple continues to see primarily as a hardware company, similarly he wants to align Volkswagen.

“The product is very sophisticated due to the software. The software ecosystem generates a high level of customer loyalty, but the margins ultimately come through the hardware business. The automotive industry will probably develop very similar” said the Diess. He assumes that Volkswagen’s high-volume competence will later provide a competitive advantage in software as well.

The future panorama

“If you can put software on 10 million cars, then that’s just ten times cheaper compared to a company that installs software in a million cars” said the Volkswagen CEO. “That should give us an enormous advantage over a startup company around 2023/2024.”

Volkswagen has announced that it will invest tens of billions in electromobility. According to the company already been awarded battery orders worth 40 billion euros – more orders are to follow. The enormous sums and quantities of the e-mobility offensive do not guarantee market leadership according to Diess. “What the big names will be, I can not say. It could be Tesla, it could be Apple, it could be someone from China. I hope it will continue to be Volkswagen – we work hard for it”.

Published inStartups

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